Type of tax-free savings account that allows individuals and their employers to set aside money to pay for health care expenses. An employer can set up an MSA for his or her employees and make an annual contribution to the MSA, which is tax deductible for both employer and employee. MSA balances accumulate from year to year tax-free, but unused funds may not be carried over in a flexible spending account (FSA) (another type of MSA). Earned interest is not taxed. MSAs are portable, allowing individuals to take their MSAs with them when they change jobs or relocate. Medicare beneficiaries are eligible to enroll in a similar tax-advantaged savings account, which may be referred to as a Medicare medical savings account . See dependent-care spending account .